Utah Judge Denies Myriad's Preliminary Injunction Motion

In a 106-page opinion, U.S. District Court Judge Robert J. Shelby on Monday denied Myriad Genetics motion for preliminary injunction in Myriad Genetics v. Ambry Genetics. Characteristic of its aggressive defense of its patent rights, the motion was, as the District Court noted, for "extraordinary" relief and thus not routine nor was the Court expected to grant the motion. The Court's detailed explication of the history of the Myriad case and the contentions of the parties will be set forth in a later post. This post is concerned with the outcome, and the grounds that the District Court relied upon in denying the motion.

The standards for a preliminary injunction are four: the patentee has to establish a likelihood of success on the merits, that she will be irreparably harmed should the injunction not issue, that the balance of the hardships is in the patentee's favor, and that the public interest is not harmed if the court grants the injunction. The District Court found in Myriad's favor on only one of these grounds, that of irreparable harm. This finding was based on expert testimony from Myriad's damages expert, whose testimony the Court credited with regard to the effects on market entry by Ambry (and others) on determining the amount of damages owed should Myriad prevail, particularly with regard to the likelihood that Myriad would be undercompensated in view of the "complex pricing and sales factors in the case." The Court also cited the unlikelihood that Myriad would be able to reverse the price erosion expected to occur with market entry of Ambry and other competitors.

The rest of the prongs of the test were in Ambry's favor according to the District Court's opinion. With regard to the balance of the hardships, the Court was not persuaded by Ambry's argument that its loss of its "head start" offset any harm to Myriad's franchise, the Court stating that "[the fact t]hat Myriad is a large company and can survive an injunction does not compel the Court to conclude that Defendant's loss of a head start outweighs Plaintiffs' loss of return on its years of work and substantial investment commercializing BRCA testing." The Court was persuaded the argument that Ambry might go out of business if the injunction should be imposed, rejecting as inapposite cases from the Federal Circuit discounting this risk to the defendant. "Notwithstanding the court's conclusion that Plaintiffs will suffer irreparable harm without an injunction," the District Court found that the balance of the hardships tilted in favor of Ambry, which could lose its business against the harm to Myriad, which is merely economic for a company "has enjoyed an exclusive monopoly in the BRCA1 and BRCA2 testing market for nearly two decades, and its own financial forecasts show that it expects to see increased revenue growth this year." The Court further stated that "[e]ven without an injunction, Plaintiffs will undoubtedly continue to benefit from Myriad's expertise, market strength, and brand name recognition" as reasons supporting its finding that the hardships balanced in Ambry's favor.

As for the public interest, the District Court stated that "both sides make compelling arguments that the public interest favors them." Accordingly, the Court found that neither side "has shown that the public interest mandates either the imposition or denial of Plaintiffs' requested injunction."

The most significant portion of the opinion is the District Court's finding that Myriad had not only failed to show a likelihood of success on the merits but that Ambry had introduced sufficient evidence to convince the Court that Myriad was unlikely to prevail and that the claims were invalid for reciting patent-ineligible subject matter. Portions of the Court's opinion should come as no surprise: the Court found that the primer and probe claims asserted by Myriad and argued to be patent-eligible subject matter because they were synthetic were not patent-eligible because they had the same sequence found in genomic DNA (a truer reading of the Supreme Court's AMP v. Myriad Genetics opinion than Myriad's interpretation of that opinion). More troubling is the District Court's determination that the asserted method claims are also patent-ineligible, relying in large part on the reasoning by Judge Illson of the Northern District of California in Ariosa Diagnostics v. Sequenom, Inc. (currently in the briefing stage before the Federal Circuit). That exercise in patent illogic has been discussed earlier; that the Utah District Court finds this reasoning persuasive is unhappy news for Myriad (as well as many other genetic diagnostic companies).

There is one other interesting quotation from the District Court's opinion that deserves comment; according to the Court:

The practical result of Myriad's patents has been to hinder or halt follow-up research, data sharing, patient testing, and the creation of additional and more affordable technologies for BRCA1 and BRCA2 testing. For example, since about 2005, Myriad has declined to publicly share critical information regarding its classification of variants, including with its own patients. Instead, Myriad retains that information in a private database.

In so doing, Myriad distorts rather than serves the patent system's goal of public disclosure in exchange for exclusive rights. In this way, Myriad has chosen a commercial path that turns much of our patent system policy on its head.

Once again, Myriad's competitors have stolen the march in the public relations arena, even with a Utah judge, who makes these statements while acknowledging elsewhere in the brief Myriad's efforts to provide testing for women who cannot afford it and to arrange insurance reimbursement for those having health insurance. Perhaps Myriad invited this outcome by asking for a preliminary injunction, which with its considerations of the public interest invite "expert" witness statements supporting this negative view. But it does raise the question (stated somewhat differently by a prominent biotech patent attorney), "Since when does a patentee lose the right to assert her patent just because she acts like a jerk." Appearances have been a motivating factor and a persuasive influence throughout the Myriad saga, and it is about time that Myriad acts to counter the perception that the company, and its patents, have been a hindrance rather than a help in bringing BRCA testing, and the accompanying health, social and economic benefits to U.S. women.

Hat tip to Joe Allen for pointing out the quoted portions of the brief.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

- hide

Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.